Boom-time in the UK housing market could end sooner than forecast following the terrorist attacks in the US, a mortgage group warned today.

Boom-time in the UK housing market could end sooner than forecast following the terrorist attacks in the US, a mortgage group warned today.

The Council of Mortgage Lenders (CML) believes the knock to economic confidence will accelerate the expected slowdown in the market.

The prediction comes despite another record set of mortgage lending figures for August.

Both the CML and the British Bankers' Association (BBA) said fears of an economic slowdown failed to distract house buyers last month.

But CML director general Michael Coogan expects a cooling of the market next year and warned last week's events could bring it forward.

He added: 'If anything, the fallout on the economy and consumer confidence from the terrorist attacks in the US may even tend towards slowing the market down more than we have previously forecast.'

However, CML said the picture prior to last week's atrocities showed continued confidence among housebuyers.

Gross mortgage lending during August rose to #16.7 billion from #15.4 billion the previous month and #11 billion in August last year.

The figures, based on mortgage completions from both banks and building societies, also showed loans for house purchases rose by 17% to #11.2 billion.

Meanwhile, the BBA said net lending by its members for mortgages rose by #3.98 billion in August, a lift of 10% on the rise achieved last month.

The latest figure is well above the underlying trend for the previous six months, which showed an increase in borrowing of #2.92 billion.

BBA chief executive Ian Mullen said: 'Fears over the direction of the economy seemed to have little influence on individuals' demand for borrowing in August.

'Mortgage lending continued to grow apace, with lenders' expectations of slowing growth not yet materialising.'

Away from the housing market, borrowing was less rampant, with the amount put on credit cards rising by just #88 million in August - about half the figure recorded a year earlier.

The BBA added that fewer tourists may have led hotels and restaurants to increase borrowing by #274 million, while a possible slowdown in the property sector was shown by weaker lending to real estate companies.

Despite the problems in UK manufacturing, firms in the sector did not increase borrowing requirements by as much as expected, the BBA added.